Seeka

[percy]

Further growth looks positive.
https://www.nzx.com/announcements/384520

[Rabbi]

Yes, they seem to be going along nicely and expanding the business with a few acquisitions and amalgamations.

[Sideshow Bob]

SEEKA CLEARS FIRST HURDLE IN NZ FRUITS AMALGAMATION - NZX, New Zealand’s Exchange

20/12/2021, 9:24 amTRANSACTSeeka Limited (“NZX:SEK”) advises that it has today completed its Due Diligence on New Zealand Fruits Limited (“NZ Fruits”), and the condition included in the Amalgamation Implementation Agreement announced on 10 December 2021 has been satisfied. The Seeka Board has considered the transaction further, and diligence reports, and has unanimously resolved to proceed with the proposed amalgamation.

The transaction still has conditions to be met, including the approval of 75% or more of NZ Fruits’ shareholders and to obtain any regulatory approvals (to the extent any are required).

Fred Hutchings, Seeka Chair, commented that the completion of due diligence and obtaining Seeka Board approval is a positive confirmation of confidence in the deal and the future of a combined business in the region. Seeka is looking forward to presenting Seeka and the offer to NZ Fruits shareholders.

Trevor Lupton, NZ Fruits Chair, stated that the amalgamation of NZ Fruits with Seeka is a positive move for the region given that Seeka has a proven track record in expanding its service offering and delivering competitive returns to its growers.

Release ends.

[turnip]

Does anyone have an idea roughly what proportion of the NZ Fruits business is kiwifruit vs. citrus and other fruits?

[BlackPeter]

Does anyone have an idea roughly what proportion of the NZ Fruits business is kiwifruit vs. citrus and other fruits?

Here we go (I trust you can do the percentages yourself :

NZ hortiexports.JPG

(google: freshfacts-2020)

Not sure though, why would you want to know? I assume you realise that Seeka is processing more than kiwifruit ... and they are in Australia as well.

https://www.seeka.co.nz/produce

[turnip]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

[turnip]

I've tried to piece together bits I've found online, not entirely sure if all the bits relate to the same time periods, but I think NZ Fruits Ltd. currently packs about a third of the national citrus crop, they could be NZ's biggest citrus post-harvest operator.

In the statement from Seeka, NZ Friuts say they need capital to expand, but perhaps that means expanding the kiwifruit operations rather than citrus, as there seem to be quite a bit of new gold kiwifruit plantings going into the area.

[dibble]

The agm chap made a point of noting they are predominantly a kiwifruit firm. So maybe treat stuff on the periphery as experimental for now. I watched the agm munching seeka avocado on toast so was a little surprised at his clarity.

[Southern Lad]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

The NZX release on 10 December announcing the amalgamation with NZ Fruits was titled “Seeka announces new Kiwifruit acquisition by amalgamation”. Seeka also pointed out the deal would deliver material efficiencies, synergies and cost savings, so this suggests Seeka’s primary interest is expanding its Kiwifruit packing capacity in Gisborne rather than an expansion into citrus fruit packing.

[iceman]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

Interesting question turnip, or so I thought, so I did some digging.

NZ Fruits (NZF) handles 8.3 m.kgs of kiwfruit, 10.6 m.kgs of citrus and 2.1 m.kgs of persimmons.Historically and currently the citrus and persimmons are sold through First Fresh. Who knows what will happen in the future !

The good thing here is that the maturity of the kiwifruit from the Gisborne area is weeks earlier than other parts of NZ, so this fruit can be trucked to Opotiki to increase the output of the current infrastructure.
Also as part of the deal, Seeka has secured exclusive supply from NZF's biggest shareholder who supplied over half of NZF's production and in fact, NZF couldn't take all his production that then went to other operators. This will now go to SEK. He is planting more.

The deal, as well as the other 2 recent ones, are earnings positive.

SEK management is very focused and doing very well in my view. I strongly feel SEK is undervalued at current SP.